What is Asset Protection Planning Not?
Hiding Assets. Many people believe that asset protection planning involves “hiding” one’s property from creditors and/or the taxing authorities. However, legitimate asset protection planning is not based on this type of secrecy. Hiding assets is often illegal, as is lying under oath to hide the existence or protect the location of such property. Last-minute Creditor Protection. Proper asset protection planning must be done prior to any lawsuits being filed or threatened, or any judgments entered. It cannot be used to defraud present creditors and probable future creditors. Doing so is not only unethical, but violates state and federal fraudulent conveyance laws. Tax Avoidance. The popular view is that offshore planning can reduce or eliminate taxes. However, U.S. citizens and residents must pay tax on income generated outside of the United States, and the taxable estate of a U.S. citizen or resident includes property owned world-wide. Although certain asset protection tools can also yi
